Macron, during G-7 lunch with Trump, defends France's digital services tax

Trump raises tariffs to 30% on some Chinese imports

AEI China expert Derek Scissors and Heritage Foundation research fellow James Roberts give their take on the tariff war between the U.S. and China.

French President Emmanuel Macron, while meeting with President Trump during the G-7 summit, defended the nation’s new tax law, which targets big U.S. technology companies like Amazon and Google.

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During a 2-hour working lunch with Trump — who has threatened to retaliate against the proposal by slapping tariffs on French products — Macron tried to stress that the tax is not an anti-American policy, according to the Associated Press, citing an official who spoke on the condition of anonymity.

Macron stressed the importance for every country to be able to tax digital activities. Trump repeatedly vowed to respond by placing an import duty on French wine imports to the U.S.

According to the French diplomat, Macron told Trump there was no link between the digital tax and the wine tariffs, trying to convince him there was no point in opening a trade war on that issue.

Ahead of the meeting, President of the European Council Donald Tusk said the European Union is prepared to stand by France if Trump moves forward with his threat to slap an import duty on French wines.

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“I will protect French wine with genuine determination for many reasons,” Tusk said, adding, “The EU stands by France. If the U.S. imposes tariffs on France, the EU will respond in kind.”

At the end of July, French President Emmanuel Macron signed the digital services tax, a 3 percent tax that targets companies worth at least 750 million euros ($834 million) globally and 25 million euros in France. It will be retroactively applied from early 2019 and is expected to generate up to 400 million euros per year.

Trade was front-and-center during the summit in Biarritz, France.

Earlier in the day, while en-route to the summit, British Prime Minister Boris Johnson weighed in on the escalating trade war between the U.S. and China, calling on both nations to remove the billions of dollars worth of tariffs.

“This is not the way to proceed,” Johnson told reporters, according to the Guardian. “Apart from anything else, those who support the tariffs are at risk of incurring the blame for the downturn in the global economy, irrespective of whether that is true.”

“I want to see an opening up of global trade, I want to see a dialing down of tensions, and I want to see tariffs come off,” he added.

Tensions between the world’s two largest economies increased on Friday when Trump retaliated against Beijing for its decision to raise tariffs on U.S. goods by sharply increasing the import duty on Chinese products beginning Oct. 1.

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